European shares sag as major financial stocks flop – Reuters

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* Aegon slumps after Q1 results miss forecasts

* Ct Agricole also falls after posting lower profits

* Mainland Europe ETF outflows worst since 2008 – UBS

By Sudip Kar-Gupta

LONDON, May 12 European stocks fell on Thursday
as a drop in the shares of major financial companies such as
Aegon and Credit Agricole weighed on the
region’s markets.

The pan-European FTSEurofirst 300 index declined by
0.7 percent, while the euro zone’s blue-chip Euro STOXX 50 index
fell 0.6 percent.

Aegon was one of the worst-performing stocks in the region.
It slumped 7.8 percent after the Dutch insurer reported
worse-than-expected first-quarter underlying pretax profit of
462 million euros ($527.19 million).

Credit Agricole also fell 3.6 percent after the
French bank reported a 71 percent fall in first-quarter net
income, although RWE shares rose after the German
utility’s results beat forecasts.

According to data from Thomson Reuters StarMine, 61 percent
of the companies on the pan-European STOXX 600 index
have beaten or met market forecasts with their first quarter
earnings, although many have done so by cutting costs in order
to offset lower revenues.

“Corporate results have not been that great so far,” said
Francois Savary, chief investment officer at Geneva-based fund
management and consultancy firm Prime Partners.

“We reduced our equity exposure in April after the market
rallied up from the February lows, and we see no need to rush
back into the market for now,” he added.

The FTSEurofirst is down by around 9 percent so far in 2016,
with global stock markets affected by concerns about weakness in
China, the world’s second-biggest economy.

UBS equity strategist Karen Olney highlighted how investors
were taking money out of mainland European equity exchange
traded funds (ETFs), and added that those outflows were at their
worst level since the global financial crisis of 2008.

Olney said $10 billion of net-selling in mainland European
ETFs since late January showed how monetary stimulus measures
from the European Central Bank (ECB) were only having a limited
impact.

“Relentless ETF outflows – worst since 2008,” Olney wrote in
a research note.

($1 = 0.8763 euros)

Today’s European research round-up

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Mike Dolan, Markets Editor EMEA.

(Editing by Richard Balmforth)